Correlation Between Mitsubishi Gas and Quaker Chemical
Can any of the company-specific risk be diversified away by investing in both Mitsubishi Gas and Quaker Chemical at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Mitsubishi Gas and Quaker Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitsubishi Gas Chemical and Quaker Chemical, you can compare the effects of market volatilities on Mitsubishi Gas and Quaker Chemical and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Mitsubishi Gas with a short position of Quaker Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsubishi Gas and Quaker Chemical.
Diversification Opportunities for Mitsubishi Gas and Quaker Chemical
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mitsubishi and Quaker is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Mitsubishi Gas Chemical and Quaker Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quaker Chemical and Mitsubishi Gas is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Mitsubishi Gas Chemical are associated (or correlated) with Quaker Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quaker Chemical has no effect on the direction of Mitsubishi Gas i.e., Mitsubishi Gas and Quaker Chemical go up and down completely randomly.
Pair Corralation between Mitsubishi Gas and Quaker Chemical
Assuming the 90 days trading horizon Mitsubishi Gas Chemical is expected to under-perform the Quaker Chemical. In addition to that, Mitsubishi Gas is 1.01 times more volatile than Quaker Chemical. It trades about -0.33 of its total potential returns per unit of risk. Quaker Chemical is currently generating about 0.08 per unit of volatility. If you would invest 13,100 in Quaker Chemical on November 28, 2024 and sell it today you would earn a total of 400.00 from holding Quaker Chemical or generate 3.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitsubishi Gas Chemical vs. Quaker Chemical
Performance |
| Timeline |
| Mitsubishi Gas Chemical |
| Quaker Chemical |
Mitsubishi Gas and Quaker Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsubishi Gas and Quaker Chemical
The main advantage of trading using opposite Mitsubishi Gas and Quaker Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsubishi Gas position performs unexpectedly, Quaker Chemical can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Quaker Chemical will offset losses from the drop in Quaker Chemical's long position.| Mitsubishi Gas vs. Major Drilling Group | Mitsubishi Gas vs. ADRIATIC METALS LS 013355 | Mitsubishi Gas vs. AEON METALS LTD | Mitsubishi Gas vs. LI METAL P |
| Quaker Chemical vs. UET United Electronic | Quaker Chemical vs. METHODE ELECTRONICS | Quaker Chemical vs. Renesas Electronics | Quaker Chemical vs. Discover Financial Services |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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